US Steel and Aluminum Tariffs Meet Resistance

6

steel tubes - US Steel and Aluminum Tariffs Meet Resistance

US President Donald Trump signed two proclamations on March 8 to impose 25 percent tariff on imports of steel and 10 percent tariff on imports of aluminum, but he offered potential exemption for Canada and Mexico.

Trump first announced the tariffs on March 1 after a Commerce Department investigation under the Section 232 of US Trade Expansion Act of 1962 that found steel and aluminum imports pose a national security threat to the US.

In 2017, the US imported 36.9 million tons of steel — counting all carbon, alloy and stainless products. Removing Mexico and Canada from the tariffs will preserve 8.9 million tons of those imports, undoubtedly much to the relief of the many steel-using, cross-border manufacturers bridging the US, Canada and Mexico — especially those serving the automotive sector.

Related Article: Steel Industry in the United States Had Begun to Revive in 2017

The tariff order, though applauded by US steel and aluminum producers, was strongly opposed by many who worry about a potential trade war with US trade partners, a disruption of the global trading system and a rising cost of raw materials for many US industries.

Following Trump’s announcement, US business associations expressed their strong opposition against the import restrictions, arguing that the high tariffs would disrupt current supply chains and increase production costs.

“Tariffs on imported steel will raise the domestic price of all steel in the US, imported or not. Any industry that relies on steel as an input will see an increase in costs. The automobile industry is one example, the aircraft industry is another,” Gene Grossman of the Department of Economics at Princeton University said in a comment on the announcement.

The International Monetary Fund said that the import restrictions announced by Trump would not only hurt the United States but also other economies.

“The import restrictions announced by the US president are likely to cause damage not only outside the US, but also to the US economy itself, including to its manufacturing and construction sectors, which are major users of aluminum and steel,” said IMF spokesperson Gerry Rice.

The IMF expressed its concern that other countries might follow Trump’s step by using “national security” to justify broad-based import restrictions.

Before the new tariff order was issued, the European Union had announced a provisional list of US items, ranging from US steel and T-shirts to chewing tobacco and orange juice that it will retaliate against over Trump’s tariffs on EU steel and aluminum.

A senior official of China’s Ministry of Commerce said the new tariffs are in essence trade protectionism in the guise of national security. He said most US steel and aluminum imports are for civil use and by no means impair US national security.

The new tariffs will take effect on March 23. That could give countries or companies a chance to try to sway the administration’s actions, according to the people familiar with the deliberations, The New York Times reported.

LEAVE A REPLY

Please enter your comment!
Please enter your name here